RBS: No economic recovery until at least 2011

The Royal Bank of Scotland (RBS) warned this week that the UK’s economy will not start recovery until 2011.

Stephen Hester, chief executive, expects unemployment to continue rising.

The journey to economic recovery will be a “marathon” rather than a “sprint”, Hester said.

“I believe we are coming out of the problems but when we start coming out it doesn’t mean that everything is good again.

“There will be years of difficult times for us all to adjust to.

“Unemployment will go up for a period longer, companies will still take time to get themselves back into shape.”

RBS recently posted a first half profit of £15 million despite having written-off £7.5 billion of bad debt.

The company is 70% owned by the taxpayer due to a £20 billion government bailout.

Hester believes the bank will be able to pay this money back.

“We believe that we can get rid of the risks that brought us down we can rebuild the value of the bank so that the taxpayer can sell out at a profit as our share price improves in future years,” he said.

“We can do all of these things and we’re setting out the road map for doing it and the way we are prepared to be judged – performance targets against us.”

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